Philippine E-Journals

A Structural Analysis of the 1985 Philippine Economy: Its Implication on A Multi-Sectoral Economic Development Strategy

Henry Ong | Emma Cecelie Liot | Wilfredo Racaza Jr.

Discipline: Economics

 

Abstract:

 

Philippine economic development through the years has been characterized by idle growth of different domestic industries which gave rise to increased output, income and employment. The structural interdependence of these industries has been regarded as the most vital part of economic development since the possible linkages that it could develop are potential contributors to growth. It is recognized that the government as an economic agent has a role to play in reallocating industries that are dynamic instruments fur industrialization by sending and implementing industrial investment priorities efficiently. Such interdependent reallocation can give rise to the so-called backward and forward linkages that could be profitably exploited when business enterprises and entrepreneurs are willing to coordinate their various investment activities. Indeed, interdependency among sector is a significant feature of modem production. The pattern of these linkages indicates a given sector's ability to stimulate other sectors. Key sectors are those that have the most linkages. Due to these interdependencies and multiplier effects, a strategy for development based on investment in key sectors should promote generalized economic development. Hence, this study attempts to analyze the industrial structure of the Philippine economy in terms of total factor input requirements, sectoral multiplier effects and industrial total percentage shares of domestic aggregate demand.